Inflation Calculator
See what an amount of money is worth across time at a chosen average annual inflation rate — project forward to 2076 or look back to 1950.
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Future cost = present cost x (1 + inflation rate) raised to the number of years
Start with the formula, because it explains everything else. That single line is why the 100 rupees in your pocket today will buy less next year, and a lot less in twenty years. Inflation is the slow leak in your money's buying power, and the exponent in that formula is the reason it gets worse the longer you wait.
Most people understand inflation in the moment. Vegetables cost more than last year. Auto fares crept up. What's harder to feel is how it stacks over decades, because the effect compounds quietly, the same way investment returns do, just working against you instead of for you.
Why a fixed corpus shrinks in real terms
Imagine you stuff 20 lakh under a mattress for retirement. The number on the notes never changes. But what those 20 lakh can actually buy keeps falling every single year. So a corpus that looks comfortable today can feel thin by the time you need it. That's the whole reason financial planners insist your money has to grow at least faster than inflation, otherwise you're going backwards while standing still.
This is also why keeping everything in a low-interest savings account quietly loses you ground. The balance grows a little, prices grow faster, and the gap is your real loss.
A twenty-year look at one family's expenses
Take a household in Chennai spending 1,00,000 a month on groceries, school fees, fuel, the usual. Assume inflation runs at around 6 percent a year. Plug it in: 1,00,000 multiplied by 1.06 raised to the power of 20. That comes to roughly 3,20,714.
Read that again. The exact same lifestyle, the same basket of stuff, costs about 3.2 lakh a month in twenty years. Their income and savings have to triple just to stay in the same place. Nobody hands you that increase automatically, which is the uncomfortable point.
What you can actually do about it
You can't switch off inflation. But you can plan around it. A few practical moves:
- Size your retirement goal using future costs, not today's prices
- Pick investments that have historically beaten inflation over long stretches, like equity
- Revisit the assumed inflation rate every few years, since it drifts
And here's a small mindset shift. When someone says they need 1 crore to retire, ask, in whose rupees? A crore today and a crore in 2046 are not the same crore. The inflation calculator's real job is to translate between those two worlds, so your plan is built on tomorrow's prices, not yesterday's.
Inflation Calculator — frequently asked questions
How does the inflation calculator work?
It uses one formula: future cost equals present cost multiplied by (1 plus the inflation rate) raised to the number of years. You enter today's amount, an expected yearly inflation rate, and the number of years ahead. The calculator compounds the rate over that period and shows what the same purchase will cost in future. It is the same compounding math as investment growth, just applied to rising prices instead of returns.
What inflation rate should I use for planning?
Indian inflation has historically hovered in a range, often around 5 to 7 percent over long periods, though it moves year to year. For general planning many people assume around 6 percent, but your personal inflation can differ if your spending is heavy on things like education or healthcare, which often rise faster. It is wise to check the current rate and revisit your assumption every few years rather than locking one number forever.
Why is inflation important for retirement planning?
Because your expenses keep climbing long after your salary stops. A corpus that looks large today may cover far less in twenty or thirty years once inflation has eroded its buying power. If you plan using today's prices, you will fall short. Sizing your retirement goal in future rupees, using an inflation calculator, helps you target a corpus that actually sustains your lifestyle when you stop earning.
Does inflation affect my savings in a bank account?
Yes, and often more than people realise. If your savings account pays a low interest rate and prices rise faster, the real value of your money is shrinking even as the balance grows. You end up able to buy less over time. This is why parking large sums in low-interest accounts for years is risky in real terms. Investments that historically beat inflation help protect your purchasing power.
How much will 1 lakh be worth in 20 years?
It depends on the inflation rate, but the buying power falls sharply. At around 6 percent inflation, you would need roughly 3,20,714 in 20 years to buy what 1 lakh buys today. Flip it around, and 1 lakh kept idle for 20 years would buy only about a third of what it does now. That gap is exactly why money needs to grow, not just sit still.
Can any investment fully protect me from inflation?
No investment guarantees it, but some have historically outpaced inflation over long periods, equity being the common example. The aim is for your money to grow faster than prices, so your real buying power rises rather than slips. Fixed low-return options often struggle to keep up once tax and inflation both take a bite. A mix suited to your time frame and risk comfort usually gives the best shot at staying ahead.
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Results from this calculator are estimates for informational use only — not financial, medical, or professional advice. Read our full disclaimer before acting on any number you see here.